Greenland and the Arctic: Still a role for the EU

As the financing of major projects in Greenland will probably come from Asia and given Greenland’s characteristics, the self-ruled territory needs to strengthen its political ties with its direct neighbourhood and historical partners: the Nordic region, the European Union and the United States, writes Damien Degeorges.

"Things are moving fast when it comes to Asia in Greenland. And the follow-up is here. China and South Korea are by far the most active, but other countries from the Asia-Pacific should not be forgotten.

Following an historic visit to Greenland in September 2012 by then-President Lee Myung-bak of South Korea, the first ever by the head of a G20 state, then-Greenland Premier Kuupik Kleist visited South Korea in December 2012.

A follow-up by high-level officials was agreed upon and took place in Greenland in June 2013. Also, when it comes to China, the follow-up doesn’t take that long. Back to November 2011, then Chinese vice-premier, now Premier, Li Keqiang received in Beijing then-Greenland Minister for Industry and Natural Resources Ove Karl Berthelsen.

Such a meeting demonstrates China’s interest in Greenland – an interest which is not new and which should neither be overestimated nor underestimated. As with South Korea, the follow-up took place rapidly: Then-Chinese Minister for Land and Resources Xu Shaoshi led a delegation of nine persons to Greenland in April 2012.

As the latest sign of growing Chinese interest in Greenland, a Chinese business delegation visited Greenland earlier this month.

It is most fascinating to see on the website of the government of Greenland the picture of a government minister with this Chinese business delegation, especially when it is possible to see on the internet the same minister posing with the Dalai Lama in a picture taken in 2006, long before he took up his current position as minister. Nothing seems to stop Chinese investors when it comes to Greenland.

Greenland has a lot to offer and wants to develop its raw material sector. Asian powers such as China and South Korea have the economic potential to invest. In a critical time where Greenland needs to start at least one project in the coming years to keep attracting foreign investors, the self-ruled territory would of course miss an opportunity by not taking the chance.

Given notably the security framework to which Greenland belongs, the territory’s challenge remains, however, to choose the right investors when the sector is a sensitive issue, as it is for rare earth elements.

The diversification of sources for foreign investments is also essential to avoid a too strong dependence. Foreign investments in the case of Greenland are not foreign investments like anywhere else.

Greenland, a territory of 2,166,086 km² inhabited by less than 57,000 persons, which got Self Rule within the Kingdom of Denmark in 2009, has everything to attract major powers. Greenland has already become a meeting place for American, European and Asian interests in the Arctic. It is also a strategic territory and a key to future developments in the Arctic.

In order to handle such a rising international interest, one of Greenland’s main challenges is capacity building. Greenland has talents, but too few to handle such an interest. As an example, Greenland's Department of Foreign Affairs only counts about 15 persons, including the minister and interns.

In the context of a global raw material sector, and because Greenland’s development takes place in a very evolutive Arctic region, it is also critical for Greenland to have more global-oriented politicians, especially when it comes to lobbying related to foreign investments at the core of Greenland’s development.

It takes only 28 people, including ministers, mayors and the majority of the Parliament, to politically run the territory. It would also help to prevent Greenland from the rise of populism in a territory which needs all its talents to succeed, including Greenlanders who have Danish as mother tongue, some of them being very much global-oriented politicians.

A single project such as the Kvanefjeld one in South Greenland (one of the largest deposit of rare earth elements and uranium in the world) could make, according to some, Greenland’s GDP rise by more than 20%. It gives one an idea of the weight such projects could have on Greenland, its economy and its few decision-makers.

Such a situation can only encourage Greenland, when possible, to choose the right partners and diversify the origin of foreign investments. As self-ruled territory, Greenland has the control over the management of its natural resources.

If Greenland aims to one day become a viable state, it will require a strong economy. In addition, as long as Greenland is a self-ruled territory, a dialogue between Denmark and Greenland will have to continue on the security dimension of Greenland’s development in the raw material sector, especially in the case of uranium.

One should have in mind that Greenland’s independence is not around the corner, even though it is made technically possible by the Self Rule Act. Only talking about economic independence, given notably the number of challenges, which require time to overcome, it is not likely to see it happen in a near future.

As the financing of major projects in Greenland will probably come from Asia and given Greenland’s characteristics, the self-ruled territory needs to strengthen its political ties with its direct neighbourhood and historical partners: the Nordic region, an area to which it belongs, the European Union and the United States.

It would balance influences and ensure a more secure development of Greenland on the long term. Such political counter-balance would also avoid the potential impact of a too strong economic dependence on heavy non-regional actors.

The EU-Greenland Partnership should be strengthened rapidly and the possibility of upgrading it to the level of a strategic partnership should be considered, in the interest of both partners.

Other frameworks, such as the OCT status which Greenland benefits, are important tools to highlight what could be a constructive role for the European Union in the Arctic: securing the development of a strong economy in Greenland.

High-level visits between the EU and Greenland should also take place more frequently and include business communities more.

As a strong signal of interest from the European Union towards Greenland, one could hope that Greenland will be on the 2014 travel agenda of the next Commission president, who ideally could use this opportunity to bring a number of European companies to Greenland."